Japan Used Car Market

Japan Used Car Market Size and Share: 

The Japan used car market size was valued at USD 66.67 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 123.16 Billion by 2033, exhibiting a CAGR of 6.38% from 2025-2033. The market is primarily driven by strict quality checks, economic compulsions leading to low-cost choices, growing e-commerce platforms, environment-friendly vehicles, good road infrastructure, the culture of maintenance of cars, increasing demand in foreign markets, and advanced technology integration for a more accurate vehicle assessment.

The market in Japan is majorly driven by high-quality manufacturing standards. Additionally, strict vehicle policies in Japan and inspection of vehicles are maintaining the used cars standards. These standards ensure that used cars retain their reliability and performance, thereby attracting domestic and international buyers looking for cost-effective options. An article by Genki Car dated November 11, 2024, discussed Japan's compulsory car inspection system, "Shaken." The article describes the purpose of the inspection to ensure that the vehicle is safe and environmentally friendly, the intervals for inspections based on the type and age of the vehicle, and the costs involved. It is essential in Japan to comply with “Shaken” to ensure road safety and avoid legal consequences. This inspection system builds consumer confidence in the used cars market and supports market expansion as the consumers value quality and long-term usability.

The increasing trend among consumers to adopt shorter vehicle ownership periods is often influenced by lease agreements or financial factors that are further driving the market growth. Furthermore, rising economic concerns are allowing consumers to opt for low-cost options, such as purchasing used cars. In addition to this, the well-maintained roads in Japan and the cultural importance attached to cleanliness contribute to the excellent condition of used cars. An article published on November 24, 2024, in The Standard, provides insights into the factors contributing to the superior condition of used cars in Japan. The article highlights Japan's efficient public transportation system, leading to lower private car usage and, consequently, lower mileage on personal vehicles.

Japan Used Car Market Trends:

Shift toward Hybrid Vehicles

The growing shift towards electric and hybrid vehicles is due to the increasing environmental consciousness and regulations by the government. In addition to this, the increasing availability of hybrid vehicles in the used car segment makes it a better choice for the consumer in terms of sustainability. According to a research paper published on November 15, 2024, by Yuki Goshima et al., data collected in Toyota City from 2011 to 2015 analyzed CO2 emissions from hybrid and electric vehicles over 3 million minutes of driving data from 68 drivers. The study found that hybrid vehicles emit less CO2 than electric vehicles in specific temperature ranges, influenced by regional electricity generation methods. Additionally, the scope of hydrogen fuel cell technology is widening the spectrum of environment-friendly vehicles in the market, as it goes in line with the global trends to reduce carbon emissions.

Increasing Digital Platforms and Online Sales

The used car market in Japan is adopting digital platforms for selling and buying increasingly, which is changing the preference of consumers. The online platforms are offering convenience, transparency and detailed information of the vehicle. For instance, On October 8, 2024, Toyota Tsusho Corporation launched the TOYOTA TSUSHO AUCTION (TTA), an information service designed to expand Japanese used car exports to emerging markets. By integrating vehicle data from domestic auto auctions with Carpaydiem Co., Ltd.'s e-commerce platform, Carused.jp, TTA allows overseas customers to access detailed vehicle condition reports and images, facilitating informed purchasing decisions. This move addresses the increasing demand for used cars in emerging markets. This move provides increased transparency and quality assurance to consumers. Additionally, virtual tours and home delivery are enhancing the ease of the buying process.

Integration of artificial intelligence (AI) and Machine Learning (ML) in Vehicle Inspection

Artificial intelligence (AI) and machine learning (ML) are greatly improving vehicle inspections in the used car market in Japan. AI-based systems read vehicle images to identify defects such as scratches, dents, and wear and tear. This minimizes human error and accelerates the inspection process. For example, On February 21, 2024, Ravin AI announced it had acquired a Japanese patent for its DeepDetect car inspection technology. It incorporates deep learning AI algorithms with stationary or mobile cameras to enhance the precision of vehicle assessment, thereby allowing for transparency across the entire automotive industry. This technology is already changing the world as it is changing the current sectors such as used car dealerships, auctions, fleet management, car rentals, insurance, and repair services, improving operational efficiency and satisfaction from customers. These tools make accurate condition assessments, which also enables fair pricing and a higher level of transparency. This innovation benefits both buyers and sellers, which is making the market more efficient and reliable.

Japan Used Car Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Japan used car market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on vehicle type, vendor type, fuel type, and sales channel.

Analysis by Vehicle Type:

• Hatchbacks
• Sedan
• Sports Utility Vehicle 
• Others
   

Hatchbacks are a prominent part of the used car market in Japan because of their compact size and practicality. They are ideal for navigating narrow city streets and are highly preferred by urban commuters and small families. They are cost-effective for budget-conscious buyers due to their affordability and fuel efficiency. The steady supply of hatchbacks from shorter ownership cycles adds to their popularity in the market.

Sedans represent the comfort, style, and reliability blend of the used car market in Japan. These cars often come from corporate fleets or owners who want to upgrade to newer models. Sedan cars attract professionals and families looking for a spacious yet sophisticated option. Durability and lower maintenance costs make them an attractive buy, thus, sedans are dominating the mid-range segment of the market.

Sports Utility Vehicles (SUVs) gained popularity within the Japan used car market, reflecting a change in consumer choice towards versatility and performance in SUVs. They possess abundant space and advanced safety and are attractive to adventure enthusiasts and families. With typically higher prices than hatchbacks and sedans, these vehicles offer a robust build and all-terrain capability and, therefore, are in huge demand. The entry of SUVs from shorter cycles of ownership further strengthens its presence.

Analysis by Vendor Type:

• Organized
• Unorganized
   

Organized vendors play a very important role in Japan's used car market, offering buyers transparency, reliability, and professional services. These dealerships often provide certified pre-owned vehicles with warranties and detailed inspection reports, ensuring quality and peace of mind for customers. Their well-established networks and digital platforms enable a seamless buying experience, making them a preferred choice for consumers seeking assurance and value in their purchase.

Unorganized dealers are a major part of the used car market in Japan, catering to those looking for low-cost alternatives and flexible negotiation terms. Most of these dealers are small-scale or individual sellers who can provide various vehicles at a low price compared to organized dealers. They do not have any formal certification process but still attract budget-conscious customers and those who are comfortable judging the condition of the vehicle on their own. Their presence in the market adds variety and accessibility.

Analysis by Fuel Type:

• Gasoline
• Diesel
• Others
   

Gasoline-powered vehicles are most popular in the Japan used car market because they are available everywhere and are cheaper to purchase. These vehicles are preferred for their quieter engines, smoother operation, and compatibility with Japan's urban-centric driving needs. Their prevalence in smaller vehicle categories like hatchbacks and sedans makes them an attractive option for city dwellers seeking affordable and efficient transportation.

Diesel-powered vehicles hold a smaller but notable share in Japan's used car market, especially in SUVs and commercial vehicles. They are widely revered for their fuel efficiency and torque. Diesel vehicles are sought after by buyers who need long-distance driving capability and heavy-load performance. Despite the strict emissions regulations, their robust build and reliability ensure continued demand, especially in rural areas and industries requiring powerful transport solutions.

Analysis by Sales Channel:

• Online
• Offline
   

Online sales channels are increasingly shaping the used car market in Japan, providing convenience and extensive options for consumers. Digital platforms allow buyers to compare prices, view detailed vehicle information, and even access financing solutions-all from the comfort of their homes. With technological advancements and growing trust in e-commerce, online platforms have become a preferred choice, especially for younger, tech-savvy consumers.

Offline sales play a significant part in the Japan used car market as clients appreciate personal inspections as well as the dealer's expertise. Traditional dealers and auctions allow personal contact, generating trust and confidence in making a purchase. These sales often cater to older demographics or first-time buyers who demand personal attention.

Regional Analysis:

• Kanto Region
• Kinki Region
• Central/ Chubu Region
• Kyushu-Okinawa Region
• Tohoku Region
• Chugoku Region
• Hokkaido Region
• Shikoku Region
   

The Kanto region covers the areas of Tokyo. The region's high level of urbanization calls for compact and fuel-efficient cars, such as hatchbacks and sedans. The region's affluent population and rapid ownership turnover lead to a steady supply of relatively new, well-maintained pre-owned cars, making it a significant contributor to the overall market.

The Kinki region, including Osaka and Kyoto, plays a vital role in the used car market due to its diverse consumer base. Urban dwellers lean towards smaller vehicles for city use, while rural buyers often seek SUVs or light trucks for versatility. The region's economic activity and cultural inclination toward quality drive demand for reliable used vehicles.

Chubu is a well-balanced market for used cars in Japan, with its industrial backbone and mix of urban and rural areas. In the cities, compact vehicles dominate the preferences, whereas SUVs and diesel-powered options dominate the rural and mountainous regions. The presence of automakers in this region ensures a steady supply of high-quality used cars, making it significant in the market.

The Kyushu-Okinawa region demonstrates a demand for fuel efficiency and affordable vehicles due to its composition of urban and semi-rural populations. Due to Okinawa's island topography, compact cars and hatchbacks are most in demand. The region's reliance on used cars reflects its need for cost-effective and accessible transportation solutions.

Tohoku, having wide rural space and relatively cold climate conditions, has a higher demand for strong and reliable vehicles-which means SUVs and four-wheel drive options. Buyers in this region prefer durability and performance in challenging weather conditions, making it a unique yet essential part of the used car market.

Both coastal and industrial areas characterize the Chugoku region, and therefore, it has different types of demand in the used car market in Japan. Urban centers prefer compact vehicles, while rural areas focus on durability and versatility. Economic activity in the region maintains a steady supply and demand for used cars, thus keeping its active participation in the market.

Hokkaido's harsh winters and rugged terrain make SUVs and four-wheel-drive vehicles highly sought after in its used car market. Customers here emphasize on safety and performance capabilities of the vehicles to thrive through the snowy and icy tracks. This demand makes Hokkaido a peculiar and necessary part of the market.

The Shikoku region, with its smaller cities and rural areas, tends to favor more compact and fuel-efficient used cars. The focus here remains on affordability and practicality, with hatchbacks and light trucks being the popular choice. The region's modest but steady demand underscores its niche yet consistent contribution to the market.

Competitive Landscape:

The used car market in Japan is highly competitive, driven by strong domestic demand for reliable and cost-effective vehicles. Market participants prioritize diverse inventories of well-maintained cars, capitalizing on Japan’s reputation for quality manufacturing and stringent inspection standards. Collaborations among dealers, auction platforms, and export networks streamline operations and broaden market access. For instance, in November 2024, Japan exported 47,000 used cars to Tanzania and 39,000 units to Kenya, highlighting the global demand for Japanese automobiles known for their reliability and advanced technology. Advanced auction systems and digital tools, including AI-based pricing and vehicle assessments, further enhance competition. Sustainability trends and partnerships focusing on electric and hybrid vehicles are shaping market strategies, aligning with the rising preference for eco-friendly transportation solutions. These factors underscore the competitive dynamics of the used car market in Japan.

The report provides a comprehensive analysis of the competitive landscape in the Japan used car market with detailed profiles of all major companies.

Latest News and Developments:

• March 14, 2024: NHK reported that the global semiconductor shortage has constrained new car availability, leading to a significant rise in used car prices in Japan. USS Co., a leading used-car auction firm, noted that in February, the average price for second-hand vehicles exceeded 1 million yen (approximately USD 8,500), marking a 20% increase from the previous year and the highest since 2000. This rise is attributed to consumers opting for used cars to avoid lengthy waits for new models, coupled with a limited supply as current owners retain their vehicles and exports of used cars continue to grow.
• May 1, 2024: ITOCHU Corporation, headquartered in Minato-ku, Tokyo, and ITOCHU ENEX Co., Ltd. announced the establishment of WECARS Co. Ltd., in partnership with J-Will Partners Co., Ltd., through the acquisition of all businesses from BIGMOTOR Co., Ltd. and its subsidiaries. The name "WECARS" signifies a commitment to fostering connections among all individuals associated with automobiles, aiming to enhance the future of the automotive industry for each customer. This initiative reflects the company's dedication to advancing the used car sector and contributing positively to society.

Japan Used Car Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Japan used car market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Japan used car market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Japan used car industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.